BILL NUMBER: AB 223	CHAPTERED  06/08/99

	CHAPTER   34
	FILED WITH SECRETARY OF STATE   JUNE 8, 1999
	APPROVED BY GOVERNOR   JUNE 8, 1999
	PASSED THE ASSEMBLY   MAY 27, 1999
	PASSED THE SENATE   MAY 25, 1999
	AMENDED IN SENATE   MAY 11, 1999
	AMENDED IN ASSEMBLY   MARCH 3, 1999

INTRODUCED BY   Assembly Member Wiggins
   (Coauthor:  Assembly Member Leach)
   (Coauthor:  Senator Rainey)

                        JANUARY 26, 1999

   An act to amend Section 97.2 of the Revenue and Taxation Code,
relating to local government finance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 223, Wiggins.  Property tax revenue shifts:  exclusions:  fire
districts.
   Existing property tax law requires the county auditor, in each
fiscal year, to allocate property tax revenue to local jurisdictions
in accordance with specified formulas and procedures, and generally
requires that each jurisdiction be allocated an amount equal to the
total of the amount of revenue allocated to that jurisdiction in the
prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
Existing property tax law also reduces the amounts of ad valorem
property tax revenue that would otherwise be annually allocated to
the county, cities, and special districts pursuant to these general
allocation requirements by requiring, for purposes of determining
property tax revenue allocations in each county for the 1992-93
fiscal year, that the amounts of property tax revenue deemed
allocated in the prior fiscal year to the county, cities, and special
districts be reduced in accordance with certain formulas.  It
requires that the revenues not allocated to the county, cities, and
special districts as a result of these reductions be transferred to
the Educational Revenue Augmentation Fund in that county for
allocation to school districts, community college districts, and the
county office of education.  It also limits the initial reduction
amount that may be so calculated and transferred with respect to a
special district to no more than 40% of that district's property tax
revenues or 10% of that district's total annual revenues.  For
purposes of applying these limits with respect to a special district,
including a fire department, that provides fire protection or fire
suppression services in a county that contracts with the state to
protect state responsibility areas, existing law specifies that the
district's total annual revenues do not include the total amount of
all funds that are appropriated to that district pursuant to certain
statutory provisions.
   This bill would clarify the application of this exclusion to a
special district in a county that contracts with the state for the
protection of state responsibility areas and in a county that does
not so contract, and would specify that this exclusion, as amended by
a specified legislative act, should not be construed to affect the
exclusion as it existed prior to those amendments.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 97.2 of the Revenue and Taxation Code is
amended to read:
   97.2.  Notwithstanding any other provision of this chapter, the
computations and allocations made by each county pursuant to Section
96.1 or its predecessor section shall be modified for the 1992-93
fiscal year pursuant to subdivisions (a) to (d), inclusive, and for
the 1997-98 and 1998-99 fiscal years pursuant to subdivision (e), as
follows:
   (a) (1) Except as provided in paragraph (2), the amount of
property tax revenue deemed allocated in the prior fiscal year to
each county shall be reduced by the dollar amounts indicated as
follows, multiplied by 0.953649:


                                      Property
                                    Tax Reduction
                                     per County
  Alameda .......................    $ 27,323,576
  Alpine ........................           5,169
  Amador ........................         286,131
  Butte .........................         846,452
  Calaveras .....................         507,526
  Colusa ........................         186,438
  Contra Costa ..................      12,504,318
  Del Norte .....................          46,523
  El Dorado .....................       1,544,590
  Fresno ........................       5,387,570
  Glenn .........................         378,055
  Humboldt ......................       1,084,968
  Imperial ......................         998,222
  Inyo ..........................         366,402
  Kern ..........................       6,907,282
  Kings .........................       1,303,774
  Lake ..........................         998,222
  Lassen ........................          93,045
  Los Angeles ...................     244,178,806
  Madera ........................         809,194
  Marin .........................       3,902,258
  Mariposa ......................          40,136
  Mendocino .....................       1,004,112
  Merced ........................       2,445,709
  Modoc .........................         134,650
  Mono ..........................         319,793
  Monterey ......................       2,519,507
  Napa ..........................       1,362,036
  Nevada ........................         762,585
  Orange ........................       9,900,654
  Placer ........................       1,991,265
  Plumas ........................          71,076
  Riverside .....................       7,575,353
  Sacramento ....................      15,323,634
  San Benito ....................         198,090
  San Bernardino ................      14,467,099
  San Diego .....................      17,687,776
  San Francisco .................      53,266,991
  San Joaquin ...................       8,574,869
  San Luis Obispo ...............       2,547,990
  San Mateo .....................       7,979,302
  Santa Barbara .................       4,411,812
  Santa Clara ...................      20,103,706
  Santa Cruz ....................       1,416,413
  Shasta ........................       1,096,468
  Sierra ........................          97,103
  Siskiyou ......................         467,390
  Solano ........................       5,378,048
  Sonoma ........................       5,455,911
  Stanislaus ....................       2,242,129
  Sutter ........................         831,204
  Tehama ........................         450,559
  Trinity .......................          50,399
  Tulare ........................       4,228,525
  Tuolumne ......................         740,574
  Ventura .......................       9,412,547
  Yolo ..........................       1,860,499
  Yuba ..........................         842,857

   (2) Notwithstanding paragraph (1), the amount of the reduction
specified in that paragraph for any county or city and county that
has been materially and substantially impacted as a result of a
federally declared disaster, as evidenced by at least 20 percent of
the cities, or cities and unincorporated areas of the county
representing 20 percent of the population within the county suffering
substantial damage, as certified by the Director of the Office of
Emergency Services, occurring between October 1, 1989, and the
effective date of this section, shall be reduced by that portion of
five million dollars ($5,000,000) determined for that county or city
and county pursuant to subparagraph (B) of paragraph (3).
   (3) On or before October 1, 1992, the Director of Finance shall do
all of the following:
   (A) Determine the population of each county and city and county in
which a federally declared disaster has occurred between October 1,
1989, and the effective date of this section.
   (B) Determine for each county and city and county as described in
subparagraph (A) its share of five million dollars ($5,000,000) on
the basis of that county's population relative to the total
population of all counties described in subparagraph (A).
   (C) Notify each auditor of each county and city and county of the
amounts determined pursuant to subparagraph (B).
   (b) (1) Except as provided in paragraph (2), the amount of
property tax revenue deemed allocated in the prior fiscal year to
each city, except for a newly incorporated city that did not receive
property tax revenues in the 1991-92 fiscal year, shall be reduced by
9 percent.  In making the above computation with respect to cities
in Alameda County, the computation for a city described in paragraph
(6) of subdivision (a) of Section 100.7, as added by Section 73.5 of
Chapter 323 of the Statutes of 1983, shall be adjusted so that the
amount multiplied by 9 percent is reduced by the amount determined
for that city for "museums" pursuant to paragraph (2) of subdivision
(h) of Section 95.
   (2) Notwithstanding paragraph (1), the amount of the reduction
determined pursuant to that paragraph for any city that has been
materially and substantially impacted as a result of a federally
declared disaster, as certified by the Director of the Office of
Emergency Services, occurring between October 1, 1989, and the
effective date of this section, shall be reduced by that portion of
fifteen million dollars ($15,000,000) determined for that city
pursuant to subparagraph (B) of paragraph (3).
   (3) On or before October 1, 1992, the Director of Finance shall do
all of the following:
   (A) Determine the population of each city in which a federally
declared disaster has occurred between October 1, 1989, and the
effective date of this section.
   (B) Determine for each city as described in subparagraph (A) its
share of fifteen million dollars ($15,000,000) on the basis of that
city's population relative to the total population of all cities
described in subparagraph (A).
   (C) Notify each auditor of each county and city and county of the
amounts determined pursuant to subparagraph (B).
   (4) In the 1992-93 fiscal year and each fiscal year thereafter,
the auditor shall adjust the computations required pursuant to
Article 4 (commencing with Section 98) so that those computations do
not result in the restoration of any reduction required pursuant to
this section.
   (c) (1) Subject to paragraph (2), the amount of property tax
revenue, other than those revenues that are pledged to debt service,
deemed allocated in the prior fiscal year to a special district,
other than a multicounty district, a local hospital district, or a
district governed by a city council or whose governing board has the
same membership as a city council, shall be reduced by 35 percent.
For purposes of this subdivision, "revenues that are pledged to debt
service" include only those amounts required to pay debt service
costs in the 1991-92 fiscal year on debt instruments issued by a
special district for the acquisition of capital assets.
   (2) No reduction pursuant to paragraph (1) for any special
district, other than a countywide water agency that does not sell
water at retail, shall exceed an amount equal to 10 percent of that
district's total annual revenues, from whatever source, as shown in
the 1989-90 edition of the State Controller's Report on Financial
Transactions Concerning Special Districts (not including any annual
revenues from fiscal years following the 1989-90 fiscal year).  With
respect to any special district, as defined pursuant to subdivision
(m) of Section 95, that is allocated property tax revenue pursuant to
this chapter but does not appear in the State Controller's Report on
Financial Transactions Concerning Special Districts, the auditor
shall determine the total annual revenues for that special district
from the information in the 1989-90 edition of the State Controller's
Report on Financial Transactions Concerning Counties.  With respect
to a special district that did not exist in the 1989-90 fiscal year,
the auditor may use information from the first full fiscal year, as
appropriate, to determine the total annual revenues for that special
district.  No reduction pursuant to paragraph (1) for any countywide
water agency that does not sell water at retail shall exceed an
amount equal to 10 percent of that portion of that agency's general
fund derived from property tax revenues.
   (3) The auditor in each county shall, on or before January 15,
1993, and on or before January 30 of each year thereafter, submit
information to the Controller concerning the amount of the property
tax revenue reduction to each special district within that county as
a result of paragraphs (1) and (2).  The Controller shall certify
that the calculation of the property tax revenue reduction to each
special district within that county is accurate and correct, and
submit this information to the Director of Finance.
   (A) The Director of Finance shall determine whether the total of
the amounts of the property tax revenue reductions to special
districts, as certified by the Controller, is equal to the amount
that would be required to be allocated to school districts and
community college districts as a result of a three hundred
seventy-five million dollar ($375,000,000) shift of property tax
revenues from special districts for the 1992-93 fiscal year.  If, for
any year, the total of the amount of the property tax revenue
reductions to special districts is less than the amount as described
in the preceding sentence, the amount of property tax revenue, other
than those revenues that are pledged to debt service, deemed
allocated in the prior fiscal year to a special district, other than
a multicounty district, a local hospital district, or a district
governed by a city council or whose governing board has the same
membership as a city council, shall, subject to subparagraph (B), be
reduced by an amount up to 5 percent of the amount subject to
reduction for that district pursuant to paragraphs (1) and (2).
   (B) No reduction pursuant to subparagraph (A), in conjunction with
a reduction pursuant to paragraphs (1) and (2), for any special
district, other than a countywide water agency that does not sell
water at retail, shall exceed an amount equal to 10 percent of that
district's total annual revenues, from whatever source, as shown in
the most recent State Controller's Report on Financial Transactions
Concerning Special Districts.  No reduction pursuant to subparagraph
(A), in conjunction with a reduction pursuant to paragraphs (1) and
(2), for any countywide water agency that does not sell water at
retail shall exceed an amount equal to 10 percent of that portion of
that agency's general fund derived from property tax revenues.
   (C) In no event shall the amount of the property tax revenue loss
to a special district derived pursuant to subparagraphs (A) and (B)
exceed 40 percent of that district's property tax revenues or 10
percent of that district's total revenues, from whatever source.
   (4) For the purpose of determining the total annual revenues of a
special district that provides fire protection or fire suppression
services, all of the following shall be excluded from the
determination of total annual revenues:
   (A) If the district had less than two million dollars ($2,000,000)
in total annual revenues in the 1991-92 fiscal year, the revenue
generated by a fire suppression assessment levied pursuant to Article
3.6 (commencing with Section 50078) of Chapter 1 of Part 1 of
Division 1 of Title 5 of the Government Code.
   (B) In counties that contract with the state to protect state
responsibility areas, the total amount of all funds, regardless of
the source, that are appropriated to a district, including a fire
department, by a board of supervisors pursuant to Section 25642 of
the Government Code or Chapter 7 (commencing with Section 13890) of
Part 2.7 of Division 12 of the Health and Safety Code for fire
protection.  In all other counties, any appropriation for fire
protection received by a special district pursuant to Section 25642
of the Government Code.  The amendment of this subparagraph by
Chapter 290 of the Statutes of 1997 shall not be construed to affect
any exclusion from the total annual revenues of a special district
that was authorized by this subparagraph as it read prior to that
amendment.
   (C) The revenue received by a district as a result of contracts
entered into pursuant to Section 4133 of the Public Resources Code.
   (5) For the purpose of determining the total annual revenues of a
resource conservation district, all of the following shall be
excluded from the determination of total annual revenues:
   (A) Any revenues received by that district from the state for
financing the acquisition of land, or the construction or improvement
of state projects, and for which that district serves as the fiscal
agent in administering those state funds pursuant to an agreement
entered into between that district and a state agency.
   (B) Any amount received by that district as a private gift or
donation.
   (C) Any amount received as a county grant or contract as
supplemental to, or independent of, that district's property tax
share.
   (D) Any amount received by that district as a federal or state
grant.
   (d) (1) The amount of property tax revenues not allocated to the
county, cities within the county, and special districts as a result
of the reductions calculated pursuant to subdivisions (a), (b), and
(c) shall instead be deposited in the Educational Revenue
Augmentation Fund to be established in each county.  The amount of
revenue in the Educational Revenue Augmentation Fund, derived from
whatever source, shall be allocated pursuant to paragraphs (2) and
(3) to school districts and county offices of education, in total,
and to community college districts, in total, in the same proportion
that property tax revenues were distributed to school districts and
county offices of education, in total, and community college
districts, in total, during the 1991-92 fiscal year.
   (2) The auditor shall, based on information provided by the county
superintendent of schools pursuant to this paragraph, allocate the
proportion of the Educational Revenue Augmentation Fund to those
school districts and county offices of education within the county
that are not excess tax school entities, as defined in subdivision
(n) of Section 95.  The county superintendent of schools shall
determine the amount to be allocated to each school district and
county office of education in inverse proportion to the amounts of
property tax revenue per average daily attendance in each school
district and county office of education.  In no event shall any
additional money be allocated from the fund to a school district or
county office of education upon that school district or county office
of education becoming an excess tax school entity.
   (3) The auditor shall, based on information provided by the
Chancellor of the California Community Colleges pursuant to this
paragraph, allocate the proportion of the Educational Revenue
Augmentation Fund to those community college districts within the
county that are not excess tax school entities, as defined in
subdivision (n) of Section 95.  The chancellor shall determine the
amount to be allocated to each community college district in inverse
proportion to the amounts of property tax revenue per funded
full-time equivalent student in each community college district.  In
no event shall any additional money be allocated from the fund to a
community college district upon that district becoming an excess tax
school entity.
   (4) (A) If, after making the allocation required pursuant to
paragraph (2), the auditor determines that there are still additional
funds to be allocated, the auditor shall allocate those excess funds
pursuant to paragraph (3).  If, after making the allocation pursuant
to paragraph (3), the auditor determines that there are still
additional funds to be allocated, the auditor shall allocate those
excess funds pursuant to paragraph (2).
   (B) (i) For the 1995-96 fiscal year and each fiscal year
thereafter, if, after making the allocations pursuant to paragraphs
(2) and (3) and subparagraph (A), the auditor determines that there
are still additional funds to be allocated, the auditor shall,
subject to clauses (ii) and (iii), allocate those excess funds to the
county superintendent of schools.  Funds allocated pursuant to this
subparagraph shall be counted as property tax revenues for special
education programs in augmentation of the amount calculated pursuant
to Section 2572 of the Education Code, to the extent that those
property tax revenues offset state aid for county offices of
education and school districts within the county pursuant to
subdivision (c) of Section 56836.08 of the Education Code.
   (ii) For the 1995-96 fiscal year only, this subparagraph shall
have no application to the County of Mono and the amount allocated
pursuant to this subparagraph in the County of Marin shall not exceed
five million dollars ($5,000,000).
   (iii) For the 1996-97 fiscal year only, the total amount of funds
allocated by the auditor pursuant to this subparagraph and
subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.3
shall not exceed that portion of two million five hundred thousand
dollars ($2,500,000) that corresponds to the county's proportionate
share of all moneys allocated pursuant to this subparagraph and
subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.3
for the 1995-96 fiscal year.  Upon the request of the auditor, the
Department of Finance shall provide to the auditor all information in
the department's possession that is necessary for the auditor to
comply with this clause.
   (C) For purposes of allocating the Educational Revenue
Augmentation Fund for the 1996-97 fiscal year, the auditor shall,
after making the allocations for special education programs, if any,
required by subparagraph (B), allocate all remaining funds among the
county, cities, and special districts in proportion to the amounts of
ad valorem property tax revenue otherwise required to be shifted
from those local agencies to the county's Educational Revenue
Augmentation Fund for the relevant fiscal year.  For purposes of ad
valorem property tax revenue allocations for the 1997-98 fiscal year
and each fiscal year thereafter, no amount of ad valorem property tax
revenue allocated to the county, a city, or a special district
pursuant to this subparagraph shall be deemed to be an amount of ad
valorem property tax revenue allocated to that local agency in the
prior fiscal year.
   (5) For purposes of allocations made pursuant to Section 96.1 or
its predecessor section for the 1993-94 fiscal year, the amounts
allocated from the Educational Revenue Augmentation Fund pursuant to
this subdivision, other than amounts deposited in the Educational
Revenue Augmentation Fund pursuant to Section 33681 of the Health and
Safety Code, shall be deemed property tax revenue allocated to the
Educational Revenue Augmentation Fund in the prior fiscal year.
   (e) (1) For the 1997-98 fiscal year:
   (A) The amount of property tax revenue deemed allocated in the
prior fiscal year to any city subject to the reduction specified in
paragraph (2) of subdivision (b) shall be reduced by an amount that
is equal to the difference between the amount determined for the city
pursuant to paragraph (1) of subdivision (b) and the amount of the
reduction determined for the city pursuant to paragraph (2) of
subdivision (b).
   (B) The amount of property tax revenue deemed allocated in the
prior fiscal year to any county or city and county subject to the
reduction specified in paragraph (2) of subdivision (a) shall be
reduced by an amount that is equal to the difference between the
amount specified for the county or city and county pursuant to
paragraph (1) of subdivision (a) and the amount of the reduction
determined for the county or city and county pursuant to paragraph
(2) of subdivision (a).
   (2) The amount of property tax revenues not allocated to a city or
city and county as a result of this subdivision shall be deposited
in the Educational Revenue Augmentation Fund described in
subparagraph (A) of paragraph (1) of subdivision (d).
   (3) For purposes of allocations made pursuant to Section 96.1 for
the 1998-99 fiscal year, the amounts allocated from the Educational
Revenue Augmentation Fund pursuant to this subdivision shall be
deemed property tax revenues allocated to the Educational Revenue
Augmentation Fund in the prior fiscal year.
   (f) It is the intent of the Legislature in enacting this section
that this section supersede and be operative in place of Section
97.03 of the Revenue and Taxation Code, as added by Senate Bill 617
of the 1991-92 Regular Session.
